Which is an emerging risk associated with cyber-enabled fraud?

Mismatch between account names and government-issued documentation

Multiple people colluding to place funds in the financial market

Receipt of joint account wire transfers

Mismatch between account names and government-issued documentation

Frequent transactions in round or whole dollars

A non-US bank is implementing a sanctions compliance program. Which extraterritorial reach of Office of Foreign Assets Control (OFAC) regulations would matter the most to the foreign bank?

OFAC has the power to impose significant penalties on foreign individuals who are found to be in violation of the blocking orders.

OFAC administers sanctions based on criminal investigations against targeted foreign individuals.

OFAC sanctions programs prohibit transactions and require the blocking of assets of foreign individuals that appear in negative media sources.

OFAC acts only under presidential wartime emergency powers, against countries and foreign individuals considered enemies of the US.

OFAC has the power to impose significant penalties on foreign individuals who are found to be in violation of the blocking orders.

A long-term client of an insurance company makes changes to a policy that require payment of an additional lump sum. The amount payable is high, though within the client's means based on the KYC information collected. The payment is made via a company in another jurisdiction that is known to have lax AML controls. Which indicator of suspicious activity is present?

The payment was made via a company in a jurisdiction known to have lax AML controls.

The payment was made via a company that appears to be owned and controlled by the client being insured.

The payment was made via a company in a jurisdiction known to have lax AML controls.

A long-term client wants a change to a policy that is already in force.

The additional premium payable appears to be within the client's means based on the KYC information collected.

Which is an objective of the Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs)?

To enforce implementation of the FATF recommendations amongst its member countries

To issue their own recommendations, considering local typologies, ignoring the FATF 40 recommendations

To work in parallel with FATF by operating on the basis of (mutual, joint, or common) recognition of their work

To enforce implementation of the FATF recommendations amongst its member countries

To work independently from FATF and to be closely involved in improving law enforcement outcomes in their regions

Cybersecurity risk can result in identity theft by:

compromising individual's personal data.

identifying bugs in personal data processors.

A professional dealer in precious metals and stones in an EU country plans to implement measures to reduce the risk of being misused for money laundering purposes. Which measures are most relevant for achieving this goal? (Select Two.)

Stop accepting payments from persons other than the beneficiary.

Limit the acceptance of purchases without adequate customer identification information.

Only accept trades related to precious metal pool accounts maintained by sophisticated precious metal companies.

Stop accepting payments from persons other than the beneficiary.

Limit direct contact between customer and employees.

Limit the acceptance of purchases without adequate customer identification information.

Stop accepting cash payments in currencies other than Euro.

Three individuals enter a casino and use cash to purchase chips worth 20,000 USD. The trio uses 200 USD in chips to play games and then combine their funds to request a casino cheque. What is the potential red flag that alludes to money laundering?

The trio engage in minimal gambling and combine the funds to request a casino cheque for the chips presented.

The trio purchased the chips with cash and proceeded to gamble.

The trio engage in minimal gambling and combine the funds to request a casino cheque for the chips presented.

The trio uses chips worth 200 USD to gamble before requesting the refund.

The trio purchased chips worth 20,000 USD and requested a casino cheque for the remaining chips.

A prospective client walks into an accounting firm wanting to incorporate a company. The accountant feels uncomfortable after the meeting. Which two of the accountant's observations warrant escalation to the compliance officer? (Select Two.)

The prospective client is unable to provide information about the beneficial owners.

The prospective client presents confusing details about the proposed business and has very little knowledge about the proposed business activity.

The prospective client is unable to provide information about the beneficial owners.

The prospective client is able to provide source of funds and source of wealth documents.

The prospective client presents confusing details about the proposed business and has very little knowledge about the proposed business activity.

The principal activities of the proposed company are importing and exporting new furniture.

The prospective client exhibits confidence when speaking to the accountant when providing personal details.

Under the Egmont Group Principles, information exchange among financial intelligence units (FlUs) should be conducted:

freely, spontaneously, and upon request, on the basis of reciprocity.

with set limits on the amount of financial and administrative information provided.

only if the status of the foreign FIU is related to law enforcement.

freely, spontaneously, and upon request, on the basis of reciprocity.

without the expectation of reciprocity on how the information will be used.

The Wolfsberg Group has issued a number of documents since its inception aiming to:

provide financial institutions with an industry perspective on effective financial crime risk management.

provide a standardized process amongst its bank members for combatting money laundering and terrorist financing in private banking.

prevent money laundering or terrorist financing by establishing consistent regulatory standards across the EU.

provide advice to regulators around the world on the due diligence requirements for politically exposed persons.

provide financial institutions with an industry perspective on effective financial crime risk management.

In accordance with Financial Action Task Force (FATF) standards, when the minimum AML requirements of the host country where a financial institution (Fl) operates are less strict than those of the Fl's home country, the Fl:

is required to ensure that their branches and majority-owned subsidiaries in host countries implement the requirements of the home country, to the extent that host country laws and regulations permit.

should always apply additional measures on their branches and majority-owned subsidiaries in host countries to manage the money laundering and terrorist financing risk overseas.

is required to ensure that their branches and majority-owned subsidiaries in host countries implement the requirements of the home country, to the extent that host country laws and regulations permit.

is required to impose more strict requirements on host country branches, disregarding if host country laws and regulation permit such action.

should close down its operations in the host countries where minimum AML requirements are less strict than those of the home country.

Private investment companies are potentially vulnerable to money laundering because:

It can be difficult to identify the people who are the ultimate beneficial owners.

they transact shares that are not traded on a stock exchange.

they exist in offshore jurisdictions with tight secrecy laws to protect the privacy of their owner(s).

they are shell companies formed to maintain a client's confidentiality.

According to recommendations from the Financial Action Task Force, what role does a country's financial intelligence unit play in safeguarding against money laundering?

Assists the pursuit of criminal activity by producing suspicious activity reports

Monitors monthly public statistics on the economy

Generates currency transaction reports to send to the central bank

Assists the pursuit of criminal activity by producing suspicious activity reports

Analyzes data on suspicious activity reports

Which are characteristics of Mutual Legal Assistance Treaties (MLATs)? (Select Three.)

MLATs only involve two countries.

MLATs cooperatively combat crime between countries.

MLATs are useful for gathering evidence and intelligence in a foreign country.

MLATs are neither public nor binding under international law.

MLATs cannot be used for obtaining banking records from treaty partners.

MLATs do not provide a legal basis for transmitting evidence.

MLATs only involve two countries.

MLATs cooperatively combat crime between countries.

MLATs are useful for gathering evidence and intelligence in a foreign country.

The compliance department receives an internal referral that appears to indicate terrorist financing. What is the first step that should be taken in the investigation process?

Gather background and transaction information.

Immediately file a suspicious activity report.

Gather background and transaction information.

A bank receives a request for a subpoena (or a client who has been the subject of monitoring for several months. The bank wishes to close the account in order to mitigate any additional risk. However, the government requires that the account remain open. What document must be provided to the bank to keep the account open?

A request in writing under proper letterhead and authority from the government

An email agreement between the government and the financial institution to keep the account open

A request in writing under proper letterhead and authority from the government

An order to keep the account open but with the funds frozen

An authorization from the board of directors

When may Office of Foreign Assets Control (OFAC) sanctioned-related transactions be allowed that would otherwise be prohibited?

Through an OFAC licensing process to determine that the transaction does not undermine the US policy objectives

When the bank's board of directors approves the OFAC risk appetite for sanction-related transactions

Through an OFAC licensing process to determine that the transaction does not undermine the US policy objectives

Only when the federal banking regulator provides OFAC approval before the transactions are processed

After going through a robust internal OFAC audit process that reviews sanction-related risks

Which are red flags indicating potential engagement of a bank employee in money laundering? (Select Two.)

Lavish lifestyle that cannot be supported by an employee's salary

Maintaining friendships with customers and going to restaurants, games, and other events

Lavish lifestyle that cannot be supported by an employee's salary

Reluctance to take a vacation when the employee has sufficient leave

Failure to meet business goals for more than one period

Providing longer than usual services for a certain customer

Maintaining friendships with customers and going to restaurants, games, and other events

Which factors specific to the securities industry increase the exposure to money laundering risk? (Select Two.)

The practice of brokerage firms maintaining securities as nominees

The increase of sector-specific guidance

The practice of brokerage firms maintaining securities as nominees

The complexity of the securities business

The link to sanctioned countries

Client A is flagged for a high volume of outgoing transfers. Further investigation reveals Client A has a potentially key role in a network linked to human trafficking. After filing a suspicious activity report, what step should the investigator take next?

Prepare a summary for senior management recommending client off-boarding.

Inform other local financial institutions about the client so they can halt potential services.

Restrain or block the client's account(s) until law enforcement makes an arrest.

Contact the Federal Bureau of Investigation (FBI) to communicate the investigation findings.

An AML specialist at a financial institution is presented with a search warrant. Which actions should be taken to comply with the search? (Select Two.)

Record the names and affiliations of the agents who conduct the search.

Obtain a copy of the warrant or photocopy the original warrant.

Remember what items the agents have seized and taken from the premise.

Record the names and affiliations of the agents who conduct the search.

Proactively ask the agents as many questions as time allows.

Leave the premises to allow the agents to conduct the search.

Obtain a copy of the warrant or photocopy the original warrant.

How does the Egmont Group assist financial intelligence unit members to accomplish their goals? (Select Three.)

Provides support to expand and systematize cooperation related to the reciprocal exchange of information

Fosters better and secure communication through the application of technology

Encourages operational autonomy of financial intelligence units

Provides support to expand and systematize cooperation related to the reciprocal exchange of information

Fosters better and secure communication through the application of technology

Develops official lists of suspected terrorists on a globally coordinated basis by relevant authorities

Encourages operational autonomy of financial intelligence units

Maintains uniform global formats for funds transfers that assist in the detection of money laundering

Supplies information on the common money laundering tactics used by terrorists and financial supporters of terrorism

What is a primary responsibility of a financial intelligence unit?

Act as an intermediary between the entities subject to money laundering obligations and law enforcement agencies.

Provide expertise to Egmont working groups including the development of new techniques to launder money.

Publish suspicious activity reports so that entities subject to money laundering obligations are aware of the identities of criminals.

Act as an intermediary between the entities subject to money laundering obligations and law enforcement agencies.

Legislate regulations that enhance the effectiveness of AML and sanctions compliance.

Which is a goal of Financial Action Task Force Regional-Style Bodies?

Analyzing new or developing methods in which criminals or terrorists abuse the financial system in their region

Executing sound AML processes in response to recommendations

Enforcing local AML laws and regulations

Analyzing new or developing methods in which criminals or terrorists abuse the financial system in their region

Setting standards to assess whether members have an adequate AML regime

Which is a valid extraterritorial effect of the USA PATRIOT Act?

Broker-dealers cannot have correspondent accounts with a foreign bank that does not have a physical presence in any country.

Foreign branches of US banks can maintain correspondent accounts with banks that do not have a physical presence in any country.

Financial institutions are allowed to specifically direct client transactions that move their funds into, out of, or through an internal bank concentration account ^

Broker-dealers cannot have correspondent accounts with a foreign bank that does not have a physical presence in any country.

Any deposits into foreign banks are not considered to have been deposited into any interbank account the foreign bank may have in the US.

A bank teller receives a written request from a police officer to review a previous customer's account on a pre-populated form with the officer's official letterhead. The officer suspects the previous customer is engaging in smurfing. Which action should the bank teller perform?

Escalate the police officer's request for the customer's account information to the compliance officer.

Provide the police officer the customer's account information after management approval.

Escalate the police officer's request for the customer's account information to the compliance officer.

Reject the police officer's request for the customer's account information and escalate to the compliance officer.

Provide the police officer the customer's account information.

Which situation would require enhanced due diligence be performed on a customer?

Company ownership is held in bearer share form.

A customer closes their store location and opens a new store location across town.

A prospective customer recently started and incorporated a new business.

Company ownership is held in bearer share form.

The low-risk rating for a customer has not changed since the relationship was established 5 years ago.

Under the Wolfsberg Correspondent Banking Principles, which action is considered an enhanced due diligence obligation to correspondent banking clients that present greater risks?

Approval of a high-risk relationship by a senior management committee

Conducting reviews on all high-risk relationships

An evaluation done by the compliance officer in charge of the account

Approval of a high-risk relationship by a senior management committee

Ongoing monitoring of clients located in tax haven countries

A company service provider in Country A sets up a corporate structure for a client from Country B, which is known for corruption. The corporate structure includes a holding company in Country A with a bank account in one of the international banks located there. During on-boarding, the client's wealth was estimated at 7.52 million USD. Shortly thereafter, the client's father became president of Country B During a routine client review two years later, it was identified that the client's wealth had grown to 510 million USD. Which are two red flags that indicate money laundering or financial terrorism? (Select Two.)

The substantial growth in wealth during a short period of time.

The client is a family member of a politically exposed person from a country known for corruption.

The substantial growth in wealth during a short period of time.

The client is from a country known for corruption.

The client is a family member of a politically exposed person from a country known for corruption.

The holding company is in Country A with a bank account in one of the international banks.

The clients account has not been reviewed for 2 years.

The recommended way lot a financial institution to respond to a request from a law enforcement agency is to:

have an audit trail system to produce requested documentation

train all staff to enable them to respond to subpoenas.

hand over documents that are protected by attorney-client privilege

freeze the identified account immediately

have an audit trail system to produce requested documentation

Which constitute red flags in connection with a company involved in illegal logging? (Select Three.)

Expeditious shipment of wood to far away jurisdictions

Use of heavy machinery in non-protected areas

Executive's association with politically exposed persons

Business registry activities state promotion of environmental protection

High number of transactions through company's connected bank accounts

Paper packaging demand production

Expeditious shipment of wood to far away jurisdictions

Use of heavy machinery in non-protected areas

Executive's association with politically exposed persons

The owner of a real estate investment company deposits multiple cashier's checks that were bought using cash over a three-month period, from the sale of two apartments. This account also receives several electronic transfers from other financial institutions for 10.000 USD each. What activity is considered suspicious of money laundering?

Using cash to buy multiple cashier's checks over a period of time

Using cashier's checks in the transactions with the real estate investment company's account

Performing operations with real estate investment companies

Receiving electronic transfers for 10.000 USD amounts from other financial institutions

Money laundering can cause which consequences for a financial institution? (Select Two.)

Increases in investigation costs and fines

Reduction or loss of profitable business

Increases in investigation costs and fines

Reduction in number of employees

Reduction or loss of profitable business

Increases in correspondent banking facilities

According to the Financial Action Task Force, financial institutions should be required to implement:

group-wide programs, including policies and procedures regarding AML compliance.

special procedures for encryption of information to be exchanged with affiliates and branches.

independent AML programs to ensure privacy and safeguard confidential information.

a process to designate an officer at a senior level who ensures a safe exchange of information for AML and terrorism financing purposes.

group-wide programs, including policies and procedures regarding AML compliance.

Which statements relate to the mandate, roles, and responsibilities of the Financial Action Task Force (FATF) and the FATF-Style Regional Bodies (FSRBs)? (Select Two).

FSRBs play an essential role in identifying and addressing AML technical assistance needs for their individual member countries.

FATF and FSRBs are free-standing organizations that share the common goals of combating money laundering and the financing of terrorism and proliferation.

In the process of setting standards. FATF will only consider inputs from its member countries as part of the consultation process.

FSRBs have the right to develop standards with which their member countries are bound to comply.

FSRBs play an essential role in identifying and addressing AML technical assistance needs for their individual member countries.

FATF and FSRBs are free-standing organizations that share the common goals of combating money laundering and the financing of terrorism and proliferation.

FATF member countries cannot be members of an FSRB at the same time.

A law enforcement agency is conducting an investigation of a financial institution (Fl). How should the Fl respond to the law enforcement agency's requests?

Address all requests completely and in a timely manner.

Disregard requests when there is a justifiable reason for doing so.

Share information about the investigation with analysts so they are aware.

Delay responses by informing senior management of requests.

Address all requests completely and in a timely manner.

A compliance officer is reviewing transactions related to a company suspected of being involved in wildlife trafficking. Which of activities below are common in wildlife trafficking schemes? (Select Two.)

Exchanging fiat currency to cryptocurrency to accomplish payment to the wildlife farm

Payment of transportation charges using a fraudulent financial instrument

Large dollar wire transfers between wildlife farms and firms operating in inconsistent lines of business

Exchanging fiat currency to cryptocurrency to accomplish payment to the wildlife farm

Activity involving politically exposed persons with environmental, game, or forestry oversight

Payment of transportation charges using a fraudulent financial instrument

Customer requests payment of proceeds to an unrelated third party

A foreign bank's compliance officer receives a request for information from a US bank, alerting the foreign bank to the possibility that it may have transferred funds on behalf of an Office of Foreign Assets Control (OFAC>-sanctioned person, who holds an account with the foreign bank. Which statements are true with respect to said funds and the information in relation to the transaction under scrutiny? (Select Two.)

If the funds are seized, then the foreign bank would be within its rights to dispute such seizure.

The USA PATRIOT Act authorizes the Secretary of the Treasury or the Attorney General to subpoena records from the foreign bank that maintains a correspondent account with a US bank,

If the funds are seized, then the foreign bank would be within its rights to dispute such seizure.

US authorities have no power (in terms of the USA PATRIOT Act) to sanction the foreign bank for transferring funds on behalf of an OFAC-sanctioned entity.

The USA PATRIOT Act authorizes the Secretary of the Treasury or the Attorney General to subpoena records from the foreign bank that maintains a correspondent account with a US bank,

If a US citizen were part of the foreign bank's Board deliberations where a decision was made to onboard the OFAC-sanctioned entity as a client, then they can be confronted with criminal charges.

US authorities are only permitted to seize the funds transferred by the foreign bank under OFAC sanctions if there is an equivalent sanctions regime of the UN which has been contravened.

ACAMS CAMS Practice Test 12 - Free Online Exam Questions 441-480

Spam

Selling illegal goods, money scams etc.

Hate Speech

Serious attack on a group.

Harassment and bullying

Harassing an individual (including doxing)

Harmful activities

Threatening or glorifying violence or serious harm, including self-harm

Adult content (Consensual)

Nudity/Sexual content

Sexual exploitation and abuse (child safety)

Sexually explicit or suggestive imagery or writing involving minors

Sexual exploitation and abuse (adults and animals)

Sexually explicit or suggestive imagery or writing involving non-consenting adults or non-humans

Plagiarism

Reusing content without attribution (link and blockquotes)

Poorly written

Not in English or has very bad formatting, grammar, and spelling

Inappropriate credential

Author's credential is offensive, spam, or impersonation

Other

Ex. Illegal content, incomplete question...

ACAMS CAMS Practice Test 12

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